Common use of Commutation Clause in Contracts

Commutation. A. This Article will only take effect should the parties hereto mutually agree to commute one or any number of the Workers’ Compensation losses under this Contract. There will be no obligation on the part of either party to so commute. B. Should the Company become liable for any loss hereunder, and be required to make periodic payments to or otherwise set up on its books reserves for such loss, at any time after seven years following the effective time and date of this Contract and upon mutual agreement of the Company and the Reinsurer, said loss (including loss adjustment expense) may be commuted. If the value of said loss, including amounts falling to the share of the Reinsurer, cannot be agreed upon by the parties to this Contract, said value may be determined by employing one of the following: 1. A present value calculation based on the following criteria: a. In respect of all unindexed benefits, the present value calculation shall be determined based upon an annual discount equal to the five-year U.S. Treasury note rate at the time of commutation; b. In respect of all future medical costs, the present value calculation shall be based upon the Company’s evaluation of long term medical care and rehabilitation requirements, using an annual discount equal to the five-year U.S. Treasury note rate at the time of commutation, and an annual escalation equal to the Medical Care Consumer Price Index (CPI-MC) at the time of commutation; c. Where applicable, impaired life expectancy, survivors’ life expectancy, as well as remarriage probability shall be reflected in the calculation by employing tables required by statute. 2. The Company may determine the present value by purchasing (or obtaining a quotation for) an annuity from any A.M. Best’s Class VIII IIA+II rated or better annuity writer, with an AAA rating by Standard & Poor’s. C. The Reinsurer’s proportion of the amount determined will be considered its total liability for such loss and the lump sum payment thereof shall constitute a complete release of both parties from liability hereunder for the commuted losses. D. This Article shall survive the termination or expiration of this Contract.

Commutation. A. This Except as defined and described in Paragraph E of this Article, this Article will only take effect should the parties hereto mutually agree to commute one or any number of the Effective: January 1, 2009 Document Draft Date: February 10, 2009 Ullico Casualty Tracking No.: DRAFT Contract with Firm Order Terms Workers’ Compensation losses under this Contract. There will be no obligation on the part of either party to so commute. B. Should the Company become liable for any loss hereunder, and be required to make periodic payments to or otherwise set up on its books reserves for such loss, at any time after seven years following the effective time and date of this Contract such loss and upon mutual agreement of the Company and the Reinsurer, said loss (including loss adjustment expenseLoss Adjustment Expenses) may be commuted. If the value of said loss, including amounts falling to the share of the Reinsurer, cannot be agreed upon by the parties to this Contract, said value may be determined by employing one of the following: 1. A present value calculation based on the following criteria: a. In respect of all unindexed benefits, the present value calculation shall be determined based upon an annual discount equal to the five-year U.S. Treasury note rate at the time of commutation;. b. In respect of all future medical costs, the present value calculation shall be based upon the Company’s evaluation of long term medical care and rehabilitation requirements, using an annual discount equal to the five-year U.S. Treasury note rate at the time of commutation, and an annual escalation equal to the Medical Care Consumer Price Index (CPI-MC) at the time of commutation;. c. Where applicable, impaired life expectancy, survivors’ life expectancy, as well as remarriage probability shall be reflected in the calculation by employing tables required by statute. 2. The Company may determine the present value by purchasing (or obtaining a quotation for) an annuity from any A.M. A. M. Best’s Class VIII IIA+II rated or better annuity writer, with an AAA rating by Standard & Poor’s. C. The Reinsurer’s proportion of the amount determined will be considered its total liability for such loss and the lump sum payment thereof shall constitute a complete release of both parties from liability hereunder for the commuted losses. D. This Article shall survive the expiration or termination or expiration of this Contract. E. In addition to the ability to commute any one or any group of individual claims, the parties to this Contract may also, upon mutual agreement and understanding, commute this entire Contract. Such commutation shall include specific rights, duties and consideration that are mutually agreeable to both the Company and the Reinsurer. Such whole Contract commutation shall be considered and negotiated in good faith by both parties in the event that the Company consummates an Initial Public Offering during the term of this Contract. In the event of such whole Contract commutation, both parties will use their best efforts to complete such commutation within ninety (90) days from the initial notice by one of the parties as to the intent to commute the Contract. Effective: January 1, 2009 Document Draft Date: February 10, 2009 Ullico Casualty Tracking No.: DRAFT Contract with Firm Order Terms

Commutation. A. This Article will only take effect should the parties hereto mutually agree to commute one or any number of the Workers’ Compensation losses under this Contract. There will be no obligation on the part of either party to so commute. B. Should the Company become liable for any loss hereunder, and be required to make periodic payments to or otherwise set up on its books reserves for such loss, at any time after seven years following the effective time and date of this Contract and upon mutual agreement of the The Company and the Reinsurer, said loss (including loss adjustment expense) Reinsurer may be commutedcommute outstanding case reserves only by mutual consent. If The Company shall submit a statement to the Reinsurer listing payments and case reserves in respect of all incurred losses reported to the Company subject to this Agreement. The statement shall form the basis of an agreed value for such case reserves. The net present value of said loss, including amounts falling to the share of the Reinsurer, cannot be agreed upon by the parties to this Contract, said value may case reserves contained therein shall be determined by employing one or more of the followingfollowing alternatives: 1. A present value calculation A. Calculation based on the following criteria: a. 1. In respect of all unindexed “index linked” benefits, the present value calculation annuity values shall be determined calculated based upon annual discount of 0%, and an annual escalation of 0%. 2. In respect of all un-indexed benefits, annuity values shall be calculated based upon annual discount equal to the five-year U.S. Treasury note rate at the time of commutation;4%. b. 3. In respect of all future medical costs, the present value annuity calculation shall be based upon the Company’s evaluation of long term medical care and rehabilitation requirements, using an annual discount equal to the five-year U.S. Treasury note rate at the time of commutation, 0% and an annual escalation equal to the Medical Care Consumer Price Index (CPI-MC) at the time of commutation;0%. c. 4. Where applicable, impaired survivor’s life expectancy, survivors’ life expectancy, expectancy as well as remarriage probability shall be reflected in the calculation by employing tables required recommended by statutea mutually acceptable actuarial consultant. 2B. Any other method of calculating the agreed net present value of one or more case reserves, as mutually agreed between the Company and the Reinsurer. Such calculation, if and when agreed by the Company and the Reinsurer, shall be considered the final and agreed value of all commuted case reserves subject to this Agreement and the resulting payment by the Reinsurer shall be accepted by the Company in full settlement of the Reinsurer’s liability for all such commuted case reserves. If agreement cannot be reached, the effort will be abandoned or, alternatively, if the Reinsurer and the Company agree to do so, then the Company shall mutually appoint an independent actuary who shall investigate, determine, and capitalize the net present value of any such unsettled claims. The cost of any independent actuary shall be shared on an equal basis by the Reinsurer and the Company. In the event the Reinsurer and the Company may determine cannot reach an agreement on an independent actuary but agree to arbitration of the net present value of outstanding losses, then each party shall appoint an actuary. If either party refuses or neglects to appoint an actuary within 30 days after settlement cannot be reached, the arbitration will be abandoned. The two chosen actuaries shall then select a third actuary. If the two actuaries fail to agree on the selection of a third actuary within 30 days after their appointment, each of them shall name three individuals, of whom the other shall decline two, and the decision shall be made by purchasing (or obtaining a quotation for) an annuity from any A.M. Best’s Class VIII IIA+II rated or better annuity writerdrawing lots. All actuaries, with an AAA rating selected by Standard & Poor’s. C. The Reinsurer’s proportion drawing lots, shall be regularly engaged in the valuation of Workers’ Compensation claims and shall be disinterested in the outcome of the amount determined commutation and shall be a Fellow of Society of Actuaries/Fellow of the Casualty Actuarial Society or an Associate of Society of Actuaries/Associate of Casualty Actuarial Society. The decision in writing of any two actuaries, when filed with the parties hereto, will be considered its total liability for such loss final and binding on both parties. The expenses of the lump sum actuaries and of the commutation shall be equally divided between the two parties. Any payment thereof by the Reinsurer under this Article shall constitute a complete release of both parties from the Reinsurer for their liability hereunder for under the excess layer(s) commuted lossesas respects such claim. D. This Article shall survive the termination or expiration of this Contract.

Commutation. A. This Article will only take effect should Subject to the parties hereto mutually agree to commute one or any number terms of the Workers’ Compensation losses under this Contract. There will be no obligation on the part of either party to so commute. B. Should the Company become liable for any loss hereunderarticle, and be required to make periodic payments to or otherwise set up on its books reserves for such lossprovided the Experience Account balance is positive, the Reinsured may, at its sole option, commute this Agreement at any time after seven years following December 31, beginning on December 31, 2003 and on or before December 31, 2014, subject to ninety (90) days prior written notice by the effective time and date Reinsured to the Reinsurer by registered or certified mail, provided that as a condition precedent to this right of this Contract and upon mutual agreement of commutation the Company Reinsured commutes all prior reinsurance agreements in existence between the Reinsurer and the ReinsurerReinsured at such date. Such prior reinsurance agreements consist of Coinsured Aggregate Excess of Loss Agreements incepting on January 1, said loss (including loss adjustment expense) may be commuted1994, January 1, 1995, January 1, 1996, January 1, 1997, and January 1, 1998. If the value of said lossReinsured elects to commute this Agreement, including amounts falling the Reinsured shall pay to the share Reinsurer as a condition precedent to the commutation the Funds Withheld Balance as of the Reinsurerdate of commutation of this Agreement and the Reinsurer shall pay to the Reinsured the positive balance, cannot be agreed upon if any, in the Experience Account as of the date of commutation within sixty (60) business days of the date of commutation: Payment of the Experience Account balance by the parties to this Contract, said value may be determined by employing one of the following: 1. A present value calculation based on the following criteria: a. In respect of all unindexed benefits, the present value calculation shall be determined based upon an annual discount equal to the five-year U.S. Treasury note rate at the time of commutation; b. In respect of all future medical costs, the present value calculation shall be based upon the Company’s evaluation of long term medical care and rehabilitation requirements, using an annual discount equal to the five-year U.S. Treasury note rate at the time of commutation, and an annual escalation equal to the Medical Care Consumer Price Index (CPI-MC) at the time of commutation; c. Where applicable, impaired life expectancy, survivors’ life expectancy, Reinsurer as well as remarriage probability shall be reflected in the calculation by employing tables required by statute. 2. The Company may determine the present value by purchasing (or obtaining a quotation for) an annuity from any A.M. Best’s Class VIII IIA+II rated or better annuity writer, with an AAA rating by Standard & Poor’s. C. The Reinsurer’s proportion of the amount determined will be considered its total liability for such loss and the lump sum payment thereof described above shall constitute a complete and final release of both parties from liability hereunder for the Reinsurer in respect of any and all of the Reinsurer's obligations of any nature whatsoever to the Reinsured under or related to this Agreement. Non-Commute Charge If the Reinsured does not commute this Agreement on or before December 31, 2004, the Reinsured shall pay to the Reinsurer in cash each January 1, beginning January 1, 2005, an annual fee (the "Non-Commute Fee") of $200,000 until such time as this Agreement is commuted lossesor until such time as all losses due under this Agreement are paid, whichever comes first. The Non-Commute Fee shall not be included in the calculation of the Experience Account balance or the Funds Withheld Account balance and shall be retained 100% by the Reinsurer. D. This Article shall survive the termination or expiration of this Contract.

Commutation. A. This Article will only take effect should the parties hereto mutually agree to commute one or any number of the Workers’ Compensation losses under this Contract. There will be no obligation on the part of either party to so commute. B. Should the Company become liable for any loss hereunder, and be required to make periodic payments to or otherwise set up on its books reserves for such loss, at any time after seven years following the effective time and date of this Contract and upon mutual agreement of the Company and the Reinsurer, said loss (including loss adjustment expense) may be commuted. If the value of said loss, including amounts falling to the share of the Reinsurer, cannot be agreed upon by the parties to this Contract, said value may be determined by employing one of the following: 1. A present value calculation based on the following criteria: a. In respect of all unindexed benefits, the present value calculation shall be determined based upon an annual discount equal to the five-year U.S. Treasury note rate at the time of commutation; b. In respect of all future medical costs, the present value calculation shall be based upon the Company’s evaluation of long term medical care and rehabilitation requirements, using an annual discount equal to the five-year U.S. Treasury note rate at the time of commutation, and an annual escalation equal to the Medical Care Consumer Price Index (CPI-MC) at the time of commutation; c. Where applicable, impaired life expectancy, survivors’ life expectancy, as well as remarriage probability shall be reflected in the calculation by employing tables required by statute. 2. The Company may determine the present value by purchasing (or obtaining a quotation for) an annuity from any A.M. Best’s Class VIII IIA+II rated or better annuity writer, with an AAA rating by Standard & Poor’s. C. The Reinsurer’s proportion of the amount determined will be considered its total liability for such loss and the lump sum payment thereof shall constitute a complete release of both parties from liability hereunder for the commuted losses. D. This Article shall survive the expiration or termination or expiration of this Contract.

Commutation. A. This Article will only take effect should the parties hereto mutually agree to commute one or any number of the Workers’ Compensation losses under this Contract. There will be no obligation on the part of either party to so commute. B. Should the Company become liable for any loss hereunder, and be required to make periodic payments to or otherwise set up on its books reserves for such loss, at any time after seven years following the effective time and date of this Contract such loss and upon mutual agreement of the Company and the Reinsurer, said loss (including loss adjustment expenseLoss Adjustment Expenses) may be commuted. If the value of said loss, including amounts falling to the share of the Reinsurer, cannot be agreed upon by the parties to this Contract, said value may be determined by employing one of the following: 1. A present value calculation based on the following criteria: a. In respect of all unindexed benefits, the present value calculation shall be determined based upon an annual discount equal to the five-year U.S. Treasury note rate at the time of commutation;. b. In respect of all future medical costs, the present value calculation shall be based upon the Company’s evaluation of long term medical care and rehabilitation requirements, using an annual discount equal to the five-year U.S. Treasury note rate at the time of commutation, and an annual escalation equal to the Medical Care Consumer Price Index (CPI-MC) at the time of commutation;. c. Where applicable, impaired life expectancy, survivors’ life expectancy, as well as remarriage probability shall be reflected in the calculation by employing tables required by statute. 2. The Company may determine the present value by purchasing (or obtaining a quotation for) an annuity from any A.M. A. M. Best’s Class VIII IIA+II rated or better annuity writer, with an AAA rating by Standard & Poor’s. C. The Reinsurer’s proportion of the amount determined will be considered its total liability for such loss and the lump sum payment thereof shall constitute a complete release of both parties from liability hereunder for the commuted losses. D. This Article shall survive the expiration or termination or expiration of this Contract.. Effective: July 1, 2008 DOC: August 21, 2008

Commutation. A. This Article will only take effect should Subject to the parties hereto mutually agree to commute one or any number terms of the Workers’ Compensation losses under this Contract. There will be no obligation on the part of either party to so commute. B. Should the Company become liable for any loss hereunderarticle, and be required to make periodic payments to or otherwise set up on its books reserves for such lossprovided the Experience Account balance is positive, the Reinsured may, at its sole option, commute this Agreement at any time after seven years following December 31, beginning on December 31, 2003 and on or before December 31, 2014, subject to ninety (90) days prior written notice by the effective time and date Reinsured to the Reinsurer by registered or certified mail, provided that as a condition precedent to this right of this Contract and upon mutual agreement of commutation the Company Reinsured commutes all prior reinsurance agreements in existence between the Reinsurer and the ReinsurerReinsured at such date. Such prior reinsurance agreements consist of Coinsured Aggregate Excess of Loss Agreements incepting on January 1, said loss (including loss adjustment expense) may be commuted1994, January 1, 1995, January 1, 1996, January 1,1997, and January 1, 1998. If the value of said lossReinsured elects to commute this Agreement, including amounts falling the Reinsured shall pay to the share Reinsurer as a condition precedent to the commutation the Funds Withheld Balance as of the Reinsurerdate of commutation of this Agreement and the Reinsurer shall pay to the Reinsured the positive balance, cannot be agreed upon if any, in the Experience Account as of the date of commutation within sixty (60) business days of the date of commutation: Payment of the Experience Account balance by the parties to this Contract, said value may be determined by employing one of the following: 1. A present value calculation based on the following criteria: a. In respect of all unindexed benefits, the present value calculation shall be determined based upon an annual discount equal to the five-year U.S. Treasury note rate at the time of commutation; b. In respect of all future medical costs, the present value calculation shall be based upon the Company’s evaluation of long term medical care and rehabilitation requirements, using an annual discount equal to the five-year U.S. Treasury note rate at the time of commutation, and an annual escalation equal to the Medical Care Consumer Price Index (CPI-MC) at the time of commutation; c. Where applicable, impaired life expectancy, survivors’ life expectancy, Reinsurer as well as remarriage probability shall be reflected in the calculation by employing tables required by statute. 2. The Company may determine the present value by purchasing (or obtaining a quotation for) an annuity from any A.M. Best’s Class VIII IIA+II rated or better annuity writer, with an AAA rating by Standard & Poor’s. C. The Reinsurer’s proportion of the amount determined will be considered its total liability for such loss and the lump sum payment thereof described above shall constitute a complete and final release of both parties from liability hereunder for the Reinsurer in respect of any and all of the Reinsurer's obligations of any nature whatsoever to the Reinsured under or related to this Agreement. Non-Commute Charge If the Reinsured does not commute this Agreement on or before December 31,2004, the Reinsured shall pay to the Reinsurer in cash each January 1, beginning January 1,2005, an annual fee (the "Non-Commute Fee") of $200,000 until such time as this Agreement is commuted lossesor until such time as all losses due under this Agreement are paid, whichever comes first. The Non-Commute Fee shall not be included in the calculation of the Experience Account balance or the Funds Withheld Account balance and shall be retained 100% by the Reinsurer. D. This Article shall survive the termination or expiration of this Contract.

Commutation. A. This Article will only take effect should the parties hereto mutually agree to commute one or any number of the Workers’ Compensation losses under this ContractAgreement. There will be no obligation on the part of either party to so commute. B. Should the Company become liable for any loss hereunder, and be required to make periodic payments to or otherwise set up on its books reserves for such loss, at . At any time after seven years following the effective time and date of this Contract such loss and upon mutual agreement of the Company and the Reinsurer, said loss (including loss adjustment expenseexpenses) may be commuted. If the value of said loss, including amounts falling to the share of the ReinsurerReinsurers, cannot be agreed upon by the parties to this ContractAgreement, said value may be determined by employing one of the followingby: 1. A present value A. An annuity calculation based on the following criteria: a. 1. In respect of all "index-linked" benefits, annuity values shall be calculated based upon applicable statutes. 2. In respect of all unindexed benefits, the present value calculation benefits annuity values shall be determined calculated based upon an annual discount equal to the five-year U.S. Treasury note Note rate at averaged over the time of commutation;five-year period immediately preceding the calculation. b. In respect of all 3. All future medical costs, the present value calculation costs shall be based upon the Company’s 's evaluation of long long-term medical medical, care and rehabilitation requirements, using an annual discount equal to the five-year U.S. Treasury note Note rate at the time of commutation, and an annual escalation equal to the Medical Care Consumer Price Index (CPICPI rate averaged over the five-MC) at year period immediately preceding the time of commutation;calculation. c. 4. Where applicable, impaired life expectancy, survivors’ survivors life expectancy, as well as expectancy and remarriage probability shall will be reflected in the calculation by employing tables required by statutestate statutes. 2. B. The Company may determine the present value by purchasing (or obtaining a quotation for) an annuity from any A.M. Best’s Class VIII IIA+II rated carrier who is "A" or better annuity writer, with an AAA rating rated by Standard & Poor’s. C. A. M. Best Company. The Reinsurer’s Reinsurers' proportion of the amount determined will be considered its their total liability for such loss and the lump sum payment thereof shall will constitute a complete release of both parties the Reinsurers from their liability hereunder for the commuted losses. D. such loss. This Article Commutation Clause shall survive the expiration or termination or expiration of this ContractAgreement.

Commutation. A. This Article will only take effect should the parties hereto mutually agree to commute one or any number By mutual agreement, after termination of the Workers’ Compensation losses under this Contract. There will be no obligation on the part of either party to so commute. B. Should Agreement the Company become liable for any loss hereundershall submit a statement to the Reinsurer listing amounts paid, and be required reserves, in respect of all incurred losses known, and reported to make periodic payments to or otherwise set up on its books reserves for such loss, at any time after seven years following the effective time and date of this Contract and upon mutual agreement of the Company and the Reinsurer, said loss (including loss adjustment expense) may be commuted. If the value of said loss, including amounts falling to the share of the Reinsurer, cannot be agreed upon by the parties subject to this Contract, said Agreement. This statement shall form the basis of a final agreed value may for all such losses. The amounts of reserves contained therein shall be determined by employing one or more of the followingfollowing alternatives: 1. A. A present value calculation based on the following criteria: a. 1. In respect of all unindexed "index linked" benefits, the present value calculation annuity values shall be determined calculated based upon annual discount of 0%, and an annual escalation of 0%. 2. In respect of all un-indexed benefits, annuity values shall be calculated based upon annual discount equal to the five-year U.S. Treasury note rate at the time of commutation;4%. b. 3. In respect of all future medical costs, the present value annuity calculation shall be based upon the Company’s 's evaluation of long term medical care and rehabilitation requirements, using an annual discount equal to the five-year U.S. Treasury note rate at the time of commutation, 0% and an annual escalation equal to the Medical Care Consumer Price Index (CPI-MC) at the time of commutation;0%. c. 4. Where applicable, impaired survivor's life expectancy, survivors’ life expectancy, expectancy as well as remarriage probability shall be reflected in the calculation by employing tables required recommended by statutea mutually acceptable actuarial consultant. 2B. Any other method of calculating the agreed value of one or more losses, as mutually agreed between the Company and the Reinsurer. The Such calculation shall be considered the final and agreed value of all known losses subject to this Agreement and the resulting loss, if any, shall be accepted by the Company may in full settlement of the Reinsurer's liability for all such losses. Notwithstanding, if the Reinsurer and the Company cannot reach a settlement by mutual agreement, then the Reinsurer and the Company shall mutually appoint an independent actuary who shall investigate, determine and capitalize the present value of any such unsettled claims under the excess layer. Cost of any independent actuary shall be shared on an equal basis by purchasing (the Reinsurer and the Company. In the event the Reinsurer and the Company cannot reach an agreement on an independent actuary, each party shall appoint an actuary. The two chosen actuaries shall then select a third actuary. If either party refuses or obtaining neglects to appoint an actuary within 30 days after settlement cannot be reached, the requesting party may appoint a quotation for) an annuity from any A.M. Best’s Class VIII IIA+II rated or better annuity writersecond actuary. If the two actuaries fail to agree on the selection of a third actuary within 30 days after their appointment, with an AAA rating each of them shall name three individuals, of whom the other shall decline two, and the decision shall be made by Standard & Poor’s. C. The Reinsurer’s proportion drawing lots. All actuaries selected by drawing lots shall be disinterested in the outcome of the amount determined commutation and shall be a Fellow of Society of Actuaries/Fellow of the Casualty Actuarial Society or an Associate of Society of Actuaries/Associate of Casualty Actuarial Society. The decision in writing of any two actuaries, when filed with the parties hereto, will be considered its total liability for such loss final and binding on both parties. The expenses of the lump sum actuaries and of the commutation shall be equally divided between the two parties. Any payment thereof by the Reinsurer under this Article shall constitute a complete release of both parties from the Reinsurer for their liability hereunder for under the excess layer(s) commuted lossesas respects such claim. D. This Article shall survive the termination or expiration of this Contract.